What's going on?
Pokemon Go, an app that’s less than a week old and involves players walking to real-life locations to “capture” virtual Pokemon characters, caused Nintendo’s stock price to rocket 25% higher on Monday. In total, about $10 billion of market value has been added to Nintendo’s stock price since the app was launched!
What does this mean?
You might remember Nintendo for making game consoles like the N64, the Wii, and the revolutionary-in-its-day Game Boy. But Nintendo’s reliance on old-school consoles became a liability in recent years as smartphones and apps grew in popularity. Last year, Nintendo made a strategic decision to focus on building out mobile apps – although the first one it released flopped (in March). Pokemon Go is actually a product of a collaboration between The Pokemon Company (in which Nintendo owns a 32% stake) and a partner company called Niantic (in which Nintendo is also invested) – so it’s actually operationally separate from Nintendo but, clearly, Nintendo is still benefitting.
Why should I care?
For the stock: It’s possibly a signal that Nintendo can make a lot of money by turning its other legacy games, like Super Mario, into smartphone apps. Nintendo was slow to turn to app development because it feared cannibalizing its existing console business, but if Pokemon Go’s success can be replicated with other games, it could be a serious win for Nintendo (and investors are taking notice).
For you personally: Augmented reality is cool – but be careful! There are numerous reports of users placing themselves in danger while playing the game, from suffering simple injuries like sprained ankles when walking and looking at their phones, to being lured to isolated areas and robbed at gunpoint. On a more positive note, many are finding a large (and growing) community of likeminded Pokemon enthusiasts wandering around public places – and that, perhaps, is a window into the future of gaming.